KUALA LUMPUR, Sept 28 — Malaysia is lacking in investment in human and physical capital leading to domestic savings greatly exceeding domestic investment, said a World Bank report.

The bank noted that Malaysia, like its fellow middle-income neighbours Indonesia, Thailand and Philippines, is trying to move out of the middle-income trap but said it requires investment in infrastructure, equipment, education and skills in levels far exceeding what they are currently experiencing, which is well short of the Republic of Korea, Japan, and Singapore when they were at similar per capita income levels, when they were at the same development stage.

KUALA LUMPUR, Sept 28 — Malaysia should eschew censorship in favour of openness in order to foster an educated citizenry that will bring about prosperity, said Wikipedia founder Jimmy Wales today.

Wales said that while censorship was tempting, it was no longer a valid option for governments to consolidate their hold on power by controlling what people know.

“Censorship is counter-productive,” he said in his speech at the World Capital Markets Symposium here.

“In the Malaysian context, for example, this is a country that has a fairly mixed record, the Internet is fairly uncensored but there is still some censorship in this country and I think we are beginning to see that it is no longer an effective strategy, certainly not an effective strategy when we think about economic growth, when we think about prosperity, when you think about making sure that the people have the information they need, make good decisions in their lives; it’s absolutely important that we have a very open flow of information.”

He said it was important that people be able to put out information so that “fellow citizens have the knowledge they need so they can’t be oppressed.”

KUALA LUMPUR, Sept 28 — Malaysia risks scaring away foreign investors if it insists on pursuing Bumiputera affirmative action policies, a top official of a major Bahrain conglomerate said today.

“There is one thing Malaysia has to be careful of. You have a ‘delightful’ law here... where you give the local population certain seats or certain preference or certain licences,” Kanoo Group deputy chairman Mishal Hamed Kanoo told reporters at the “Dawn of the New Decade: Alternative Investments in Asia” forum here today.

“If you do that and foreign investors want to come in — they’re not used to this idea — you might scare them.”

Kanoo Group is one of the biggest independent companies in the Gulf region of the Middle East. It is also a partner with Malaysia’s CIMB in the CIMB-Kanoo Islamic Investment Company.

Likening the government’s pro-Bumiputera policies to covering one perceived “sin” with another, Kanoo later told The Malaysia Insider that only competition could ensure that the country developed the best products and achieved the best results.

“I don’t mean competition as in nasty, killing each other but competition [in the sense] that I want to be there or I am there because I deserve to be there, rather than because somebody has taken my hand or I was born under a certain star,” he said.

“These things should be taken away so that the best and the brightest become the best and the brightest... not because they know there’s no competition [but] because they know there is competition and that they are better than the competition. That’s what drives things.”

Drawing parallels between Bumiputera equity quotas and Saudi Arabia’s policy of “Saudisation”, Kanoo said such requirements were an unnecessary “extra hassle” that only burdened potential foreign investors wanting to do business in Malaysia.

“For a foreign entity coming into this market not knowing these things and then discovering these things, they’re not going to be too happy,” he said.

However, he pointed out that Malaysia was still regarded highly by the Islamic world, and remained well-positioned to leverage its competitive advantages as the premier Islamic financial centre outside of Bahrain and potential international hub for Islamic food marketing.

Kanoo nonetheless cautioned that Malaysia first needed to address its “internal issues” before it could begin to move forward in the right direction.

“I find it strange. Malaysia is seriously a success story, and I think Malaysia’s worst enemies are the Malaysians themselves,” he observed.

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